Court ruling means Phoenix may owe damages to businessowner impacted by light-rail construction - Ahwatukee Foothills News: Valley And State

Court ruling means Phoenix may owe damages to businessowner impacted by light-rail construction

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Posted: Monday, May 27, 2013 10:34 pm | Updated: 10:40 am, Wed Jun 5, 2013.

Business owners whose access is even partly blocked by a street improvement project can get damages if the value of their property is decreased, the Arizona Court of Appeals has ruled.

In a unanimous decision, the judges slapped down efforts by Phoenix to avoid paying damages to the owner of a property which lost access to traffic from Jefferson Street due to the light rail.

Attorneys for the city conceded the project permanently blocked two driveways facing Jefferson Street. They said, though, John Garretson still had access from Madison Street.

That, the lawyers argued, means he suffered no loss. And a trial judge agreed, throwing out Garretson's claim.

But Judge Michael Brown, writing for the court, said Garretson has raised genuine issues of whether the city's action "materially impaired'' the right of access and, in doing so, diminished the value of his property. He said that entitles Garretson to take his case to court.

The issue surrounds about 36,000 square feet Garretson owns bounded by Jefferson, Madison and First streets. The property is currently used as a commercial parking lot.

Garretson and the city did agree to provide the city a temporary construction easement on part of the property, with the value to be determined later.

The final project involved the city putting tracks on the south side of Jefferson Street, between the one-way traffic and the property. That also included construction of a concrete barrier on the south side of the tracks, permanently blocking the two driveways which had allowed access to Jefferson Street.

When Garretson sought compensation, the city argued that it had used its authority to control access to roadways as part of its police power. That, they said, means there is no requirement to compensate Garretson for any damage to the property.

Anyway, they said, because people could still get to the property from other streets, access had not been "substantially impaired'' in any way justifying compensation.

The trial judge, in tossing the case, accepted the latter theory.

Brown said that is not the case.

"When the government eliminates a property owner's established access to an abutting street and the owner retains access from another street, the owner is not necessarily foreclosed from obtaining compensation for damages to the property under the Arizona Constitution,'' he wrote.

Brown said while the facts of this case are unique, there is precedent for that conclusion.

For example, he cited a 1960 Arizona Supreme Court ruling involving a property along a state road where motorists going either direction had access.

That was replaced with a controlled-access highway. The property was still accessible, but only by traveling about 1,500 feet on a frontage road.

In that case, Brown said, the high court said someone whose land is adjacent to a road has a property right to that ingress and egress.

And eight years later, the Supreme Court said while property owners have no right to insist that traffic pass directly in front, that does not mean they cannot profit from that traffic flow.

That, then, goes to the issue of whether or not Garretson can prove he has been damaged.

One engineer hired by Garretson said the loss of Jefferson Street access impaired the potential to develop the property. That expert said it would decrease the potential for office space from 295,000 square feet to 125,000.

An appraiser said the property is in a "strategic location,'' being within walking distance of the baseball stadium, the basketball arena and the Phoenix Civic Plaza. That report also noted the property was zoned for high density mixed-used development.

The appraiser said the loss of access -- and the loss of "site prominence'' -- to Jefferson makes the value of the property "substantially inferior to the location it enjoyed in the before condition.''

All that, Brown wrote, entitles Brown to make his case to a jury that access to his property was materially impaired and seek damages.

Brown said, though, the appellate court was not saying how much Garretson should get, if anything.

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